Assessment of Internal Auditors Compliance with Quality Assurance Standards- a Case of State Owned Corporations in Nairobi

Abstract

The Internal Audit Department in any organization (including State Owned Corporations) has a role of assisting the management in achieving their objectives and adding value to organizational operations by evaluating and improving the effectiveness of risk management, internal controls and governance processes. To achieve this, the Internal Audit Department is required by the IIA to carry out a continuous internal quality assessment and an external assessment at least once in five years. The literature suggests that internal auditors in Africa including Kenya do not comply with the quality assurance standards as set by the IIA. The researcher collected data from 24 Internal Audit Units from State Owned Corporations regarding their compliance with quality assurance standards. The researcher carried out a hypothesis testing using the data collected to find out whether the audit departments in state owned corporations comply with quality assurance standards. The study found out that there is generally low compliance with quality assurance standards among most internal audit units in state owned corporations in Nairobi. The research identified some of the reasons that led to low compliance. They include; lack of awareness of standards; non-membership with IJA; non adoption of IPPF; age and experience of the internal audit department and understanding of the quality assurance standards. This research covered only a small portion of the internal audit departments' population since it concentrated on the state owned corporations in Nairobi. More research should be done on this topic especially to extend the research to internal audit units in the private sector and to cover more geographical locations.